BPM - CG CC 7597 Transferred Frequency Response Charge

Settlements & Billing

BPM Configuration Guide: Transferred Frequency Response Charge

CC 7597

Version 5.0 Settlements & Billing Version: 5.0 Configuration Guide for: Transferred Frequency Response Date: 05/13/16 Cost Allocation Table of Contents

1. Purpose of Document 3

2. Introduction 3 2.1 Background 3 2.2 Description 3

3. Charge Code Requirements 3 3.1 Business Rules 3 3.2 Predecessor Charge Codes 6 3.3 Successor Charge Codes 6 3.4 Inputs - External Systems 6 3.5 Inputs - Predecessor Charge Codes or Pre-calculations 7 3.6 CAISO Formula 8 3.7 Outputs 10

4. Charge Code Effective Dates 14

ÓCAISO, 2018 Page 2 of 14 Settlements & Billing Version: 5.0 Configuration Guide for: Transferred Frequency Response Date: 05/13/16 Cost Allocation

1. Purpose of Document

The purpose of this document is to capture the requirements and design specification for a Charge Code in one document.

2. Introduction

2.1 Background

The CAISO shall invoice all Scheduling Coordinators (SCs) for legitimate Transferred Frequency Response (TFR) costs that are invoiced to the CAISO by an external Balancing Authority Area entity (the TFR provider). Each SC shall be obligated to pay the CAISO all of the Transferred Frequency Response Charges it is invoiced by the CAISO in accordance with the applicable provisions of the CAISO tariff. Each SC’s responsibility for Transferred Frequency Response Charges is based on its calculated NERC/WECC Metered Demand.

2.2 Description

The CC 7597 Transferred Frequency Response charge configuration will calculate the allocation amount to Scheduling Coordinators, based on their NERC/WECC metered demand. The CAISO will perform the calculations necessary to implement the business rules identified in the Business Rules section below. Additional processing rules associated with the settlement and invoicing for the Transferred Frequency Response charge are defined in the main body of the BPM for Settlement & Billing.

For the purpose of Settlements implementation, the Transferred Frequency Response charge shall be reflected in an initial settlement statement, while a recalculation settlement statement shall reflect changes required to correct an invoice for typographical or other ministerial error. The Transferred Frequency Response charge settlement statements shall be separate from other market settlement statement types.

The Transferred Frequency Response charges (either from an initial statement or recalculation statement) shall be invoiced using the Frequency Response invoice type that is separate from the Market invoice type and NERC/WECC type.

3. Charge Code Requirements

3.1 Business Rules

Bus Req Business Rule ID The CC 7597 Transferred Frequency Response charge code is calculated 1.0 at an annual frequency. Transferred Frequency Response charges are charges for all legitimate 1.1 costs invoiced to the CAISO by a Balancing Authority under a contract for Transferred Frequency Response. (Fact) The CAISO will issue the Transferred Frequency Response charge-related 1.2 statements and invoices separate from other market settlement statement and invoice types. For the purpose of Settlements implementation, the Transferred Frequency Response charge shall be reflected in an initial settlement statement, while 1.3 a recalculation settlement statement shall reflect changes required to correct an invoice for typographical or other ministerial error. The Transferred Frequency Response charge statement date will be the 1.4 first trade date of the assessment year. The Transferred Frequency Response charge assessment year is defined as a calendar year about two years prior to the compliance year for which Frequency Response insurance is procured from a TFR provider. 1.4.1 For example, for NERC/WECC compliance year from December 1, 2016 to November 30, 2017, for which CAISO procures insurance for frequency response, the compliance year would be considered as year 2017 and so the TFR charge assessment year is the calendar year two years prior, which is calendar year 2015. The Transferred Frequency Response charge (either from an initial statement or recalculation statement) shall be invoiced using the 1.5 Transferred Frequency Response invoice type that is separate from the Market invoice type and NERC/WECC type. The separate Transferred Frequency Response invoice will reflect a single 1.5.1 day bill period which encompasses the first trade date of the assessment year. The CAISO shall invoice Scheduling Coordinators for all of the charges 2.0 that are invoiced to the CAISO by the Transferred Frequency Response provider. Each Scheduling Coordinator shall be obligated to pay the CAISO all of the 2.1 Transferred Frequency Response charges it is invoiced by the CAISO. (Fact) Each Scheduling Coordinator’s responsibility for Transferred Frequency 2.2 Response Charges shall be allocated based on the Scheduling Coordinator’s NERC/WECC Metered Demand. 2.2.1 The NERC/WECC Metered Demand value per Scheduling Coordinator (as identified by its Business Associate ID) that is used to determine the Transferred Frequency Response Charges shall be provided on the NERC/WECC Information Statement (as defined for charge code CC 6490

Bus Req Business Rule ID – NERC WECC Charge), the Transferred Frequency Response charge code Initial Statement, and the Transferred Frequency Response charge code Recalculation Statement. Within 5 Business Days after receiving the invoice for Transferred Frequency Response Charges from the Transferred Frequency Response provider, the CAISO shall issue a market notice setting forth the 3.0 Transferred Frequency Response charge rate for the assessment year, which shall be calculated using the total Transferred Frequency Response Charges invoiced to the CAISO divided by the most recent total NERC/WECC Metered Demand. The CAISO shall calculate the Transferred Frequency Response charges allocable to each Scheduling Coordinator by using the Transferred 4.0 Frequency Response Charge rate for the assessment year, multiplying such rate by the most recent NERC/WECC Metered Demand for that Scheduling Coordinator for the assessment year. Within 10 Business Days after receiving the invoice for the Transferred Frequency Response charges, the CAISO shall issue an invoice to each 5.0 Scheduling Coordinator for its allocable share of the Transferred Frequency Response charges. Scheduling Coordinators shall make timely payment to the CAISO within 5.1 fifteen (15) Business Days of the date the CAISO issues the invoices. (Fact) Each Scheduling Coordinator shall have the opportunity to review the terms of the invoice for the charge for TFR and shall be deemed to have 5.2 validated that invoice unless it raises a dispute within five (5) Business Days of the date of issuance. (Fact) Scheduling Coordinators shall be prohibited from disputing any Transferred Frequency Response Charges, except on grounds that an error in the 5.3 invoice is due to a mere typographical or other ministerial error by the CAISO. (Fact) If the CAISO determines that an invoice contains a typographical or other 5.4 ministerial error, the CAISO will issue a corrected invoice within 15 Business Days of the date the initial invoice was issued. In the event a Scheduling Coordinator defaults on the payment of all or any portion of the invoiced Transferred Frequency Response Charges, the CAISO shall have the right under Tariff Section 11.29.13.3 to enforce the 6.0 financial security provided by the defaulting Scheduling Coordinator, and to take any such other action under Tariff Sections 11.29.12 or 11.29.13, as necessary, to obtain payment for the default amount. (Fact) 6.1 To the extent all or any portion of the default amount remains unpaid, the CAISO – (1) may issue an invoice for the unpaid Transferred Frequency

Bus Req Business Rule ID Response Charges; and (2) if such invoice is issued for a payment default, shall allocate responsibility for the shortfall to Scheduling Coordinators with 6.2 NERC/WECC Metered Demand, excluding the CAISO Debtor that has not paid the payment default amount, based on the most recent NERC/WECC Metered Demand for each Scheduling Coordinator. Scheduling Coordinators shall make timely payment to the CAISO within 6.3 15 Business Days of the date the default invoices were issued. For Settlements business implementation, the Scheduling Coordinator 7.0 mentioned in the Tariff shall be identified using the Business Associate (BA) ID. (Fact) In the event CAISO reassigns a Business Associate’s (BA) meter data quantity to another BA ID, meter data quantity PTBs (also applied in the 7.1 configuration for CC 6490 – NERC WECC Charge) will facilitate both reversing out and reassigning the original BA ID meter data quantity to another BA ID.

3.2 Predecessor Charge Codes

Charge Code/ Pre-calc Name < None >

3.3 Successor Charge Codes

Charge Code/ Pre-calc Name < None >

3.4 Inputs - External Systems

Row # Variable Name Description 1 BusinessAssociateYearly A Business Associate’s yearly Metered NERCWECCMeteredDem Demand quantity (in MWh) that is used andQuantity BUU’md to allocate the Transferred Frequency Response charge for an associated assessment year. The input is the same one that is used to allocate the NERC and WECC charge for the assessment

Row # Variable Name Description year.

2 PTB_TransferredFrequen Amount (in $) that aTransferred cyResponseAmount Frequency Response (TFR) provider UU’Jmd invoiced to CAISO for TFR associated with a given assessment year. 3 PTBBusinessAssociateN PTB BA NERC/WECC reassign or ERCWECCAdjustmentMe reverse meter data quantity (in MWh) terDataQty BUU’Jmd 4 PTB_BATransferredFrequ The default (late and unpaid) amount (in encyResponseChargeDef $) on the payment owed by a Business aultAmount BUU’Jmd Associate (BA) as payment for the Transferred Frequency Response Charge allocated to the BA over the specified assessment period.

3.5 Inputs - Predecessor Charge Codes or Pre-calculations

Row Predecessor Charge Code/ Variable Name # Pre-calc Configuration < None >

3.6 CAISO Formula

The CAISO formula for Transferred Frequency Response Charge Amount by BA ID (B) and assessment year (bounded by the bill period start U’ and bill period end U. is as follows:

BAYearlyTFRChargeTotalAllocationAmount BUU’md =

BAYearlyTFRChargeDefaultRelatedAllocationAmount BUU’md + BAYearlyTFRChargeNonDefaultAllocationAmount BUU’md

BAYearlyTFRChargeDefaultRelatedAllocationAmount BUU’md =

BAYearlyNonDefaultBAAdjustedTFRMeteredDemandQuantity BUU’md * (CAISOYearlyTFRChargeDefaultAmount UU’md / CAISOYearlyNonDefaultBAAdjustedTFRMeteredDemandQuantity UU’md )

CAISOYearlyTFRChargeDefaultAmount UU’md =

CAISOTransferredFrequencyResponseAmount UU’md – CAISOYearlyTFRChargeNonDefaultAmount UU’md

CAISOYearlyNonDefaultBAAdjustedTFRMeteredDemandQuantity UU’md =

 BAYearlyNonDefaultBAAdjustedTFRMeteredDemandQuantity BUU’md B

BAYearlyNonDefaultBAAdjustedTFRMeteredDemandQuantity BUU’md = IF

BATFRChargeDefaultAmount BUU’md = 0

BAYearlyNonDefaultBAAdjustedTFRMeteredDemandQuantity BUU’md

= BAYearlyAdjustedNERCWECCMeteredDemandforTFRQuantity BUU’md

BAYearlyNonDefaultBAAdjustedTFRMeteredDemandQuantity BUU’md = 0

END IF

CAISOYearlyTFRChargeNonDefaultAmount UU’md =

 BAYearlyTFRChargeNonDefaultAllocationAmount BUU’md B

BAYearlyTFRChargeNonDefaultAllocationAmount BUU’md =

(-1) * [1 – (Min(BATFRChargeDefaultAmount BUU’md, BAYearlyTFRChargeAllocationAmount BUU’md ) / BAYearlyTFRChargeAllocationAmount BUU’md )] * BAYearlyAdjustedNERCWECCMeteredDemandforTFRQuantity BUU’md * CAISOTFRChargeRate UU’md

BAYearlyTFRChargeAllocationAmount BUU’md =

(-1) * BAYearlyAdjustedNERCWECCMeteredDemandforTFRQuantity BUU’md * CAISOTFRChargeRate UU’md

BAYearlyAdjustedNERCWECCMeteredDemandforTFRQuantity BUU’md =

BAYearlyNERCWECCUnadjustedMeteredDemandforTFRQuantity BUU’md + BAYearlyNERCWECCMeteredDemandAdjustmentforTFRQuantity BUU’md

BAYearlyNERCWECCUnadjustedMeteredDemandforTFRQuantity BUU’md =

BusinessAssociateYearlyNERCWECCMeteredDemandQuantity BUU’md

CAISOTFRChargeRate UU’md = (-1) * CAISOTransferredFrequencyResponseAmount UU’md / CAISOYearlyAdjustedTFRMeteredDemandQuantity UU’md

CAISOYearlyAdjustedTFRMeteredDemandQuantity UU’md =

 BAYearlyAdjustedNERCWECCMeteredDemandforTFRQuantity BUU’md B

CAISOTransferredFrequencyResponseAmount UU’md =

 PTB_TransferredFrequencyResponseAmount UU’Jmd J

BAYearlyNERCWECCMeteredDemandAdjustmentforTFRQuantity BUU’md =

 PTBBusinessAssociateNERCWECCAdjustmentMeterDataQty BUU’Jmd J

BATFRChargeDefaultAmount BUU’md =

 PTB_BATransferredFrequencyResponseChargeDefaultAmount BUU’Jmd J

3.7 Outputs

Row # Name Description In addition to any outputs 1 listed below, all inputs shall be included as outputs. Transferred Frequency Response Charge amount (in $), including both non-default and default-related portions, by Business Associate (B) for a given assessment year (as a Trading Year). The bill period start date (U) and bill period end date (U’) BAYearlyTFRChargeTotalAllo are mapped as the first and the last date 2 of the NERC/WECC Metered Demand for cationAmount BUU’md the assessment year, respectively. (Thus, Transferred Frequency Response procured for year 2017, the bill period start date will be January 1, 2015 and the bill period end date will be December 31, 2015.) The statement date will be the bill period start date. Transferred Frequency Response Charge default amount (in $) by Business Associate (B) for a given assessment year (as a Trading Year). The bill period start date (U) and bill period end date (U’) are mapped as the first and the last date BAYearlyTFRChargeDefaultR of the NERC/WECC Metered Demand for 3 elatedAllocationAmount BUU’md the assessment year, respectively. (Thus, Transferred Frequency Response procured for year 2017, the bill period start date will be January 1, 2015 and the bill period end date will be December 31, 2015.) The statement date will be the bill period start date.

Row # Name Description Amount (in $) of the Transferred CAISOYearlyTFRChargeDefa Frequency Response charge for a given 4 assessment year that went unpaid by all ultAmount UU’md Business Associates who received an allocated amount of the charge. Metered Demand quantity (in MWh), including FERC-approved Metered CAISOYearlyNonDefaultBAAd Demand adjustments (i.e, the most recent NERC/WECC Metered Demand quantity), 5 justedTFRMeteredDemandQu for all Business Associates who have paid antity UU’md in-full their most recent Transferred Frequency Response charge for a given assessment year. Metered Demand quantity (in MWh), including FERC-approved Metered Demand adjustments (i.e, the most recent NERC/WECC Metered Demand quantity), BAYearlyNonDefaultBAAdjust for a Business Associate (B) and given 6 edTFRMeteredDemandQuanti assessment year (as a Trading Year), ty BUU’md where the Business Associate has paid in-full the most recent Transferred Frequency Response charge allocated to the Business Associate for the assessment year. Amount (in $) of the Transferred CAISOYearlyTFRChargeNon Frequency Response charge for a given 7 assessment year that was collected from DefaultAmount UU’md all Business Associates who received an allocated amount of the charge. Amount (in $) of the Transferred BAYearlyTFRChargeNonDefa Frequency Response charge for a given 8 assessment year that was collected from ultAllocationAmount BUU’md a Business Associate who was allocated the charge. 9 BAYearlyTFRChargeAllocatio Transferred Frequency Response Charge nAmount BUU’md Amount (in $), prior to allocation of any default amounts, by Business Associate (B) for a given assessment year (as a Trading Year). The bill period start date (U) and bill period end date (U’) are mapped as the first and the last date of the NERC/WECC Metered Demand for the assessment year, respectively. (Thus, Transferred Frequency Response procured for year 2017, the bill period start date will be January 1, 2015 and the

Row # Name Description bill period end date will be December 31, 2015.) The statement date will be the bill period start date. Metered Demand quantity (in MWh) for a Business Associate and given BAYearlyAdjustedNERCWEC Transferred Frequency Response charge assessment year, calculated as the sum 10 CMeteredDemandforTFRQua of the Business Associate’s NERC WECC ntity BUU’md Metered Demand quantity and NERC WECC Metered Demand Adjustment Quantity over the assessment year. Metered Demand quantity (in MWh) for a Business Associate and given BAYearlyNERCWECCUnadju Transferred Frequency Response charge 11 stedMeteredDemandforTFRQ assessment year, as the Business uantity BUU’md Associate’s NERC WECC Metered Demand quantity (without adjustment), over the assessment year. CAISO Transferred Frequency Response Charge Rate (in $/MWh) by Trading Year. The bill period start date (U) and bill period end date (U’) are mapped as the first and the last date of the NERC/WECC Metered Demand for the assessment

12 CAISOTFRChargeRate UU’md year, respectively. (e.g.For Transferred Frequency Response procured for compliance year 2017, the bill period start date will be January 1, 2015 and the bill period end date will be December 31, 2015.) The statement date will be the bill period start date. 13 CAISOYearlyAdjustedTFRMet CAISO NERC/WECC Metered Demand eredDemandQuantity UU’md Quantity (in MWh), including NERC or WECC-approved Metered Demand adjustments, for a given assessment year (as a Trading Year). The bill period start date (U) and bill period end date (U’) are mapped as the first and the last date of the NERC/WECC Metered Demand for the assessment year, respectively. (e.g.For Transferred Frequency Response procured for compliance year 2017, the bill period start date will be January 1, 2015 and the bill period end date will be December 31, 2015.) The statement date will be the bill

Row # Name Description

period start date. CAISOTransferredFrequency CAISO Transferred Frequency Response 14 ResponseAmount UU’md Funding Amount (in $) by Trading Year. Business Associate NERC/WECC Metered Demand Adjustment Quantity (in MWh) for a given assessment year (as a Trading Year). The bill period start date (U) and bill period end date (U’) are mapped as the BAYearlyNERCWECCMetere first and the last date of the NERC/WECC 15 o dDemandAdjustmentforTFRQ Metered Demand for the assessment uantity BUU’md year, respectively. (e.g.For Transferred Frequency Response procured for compliance year 2017, the bill period start date will be January 1, 2015 and the bill period end date will be December 31, 2015.) The statement date will be the bill period start date. Amount ($) of an allocated Transferred BATFRChargeDefaultAmount Frequency Response charge that is 16 allocated to a Business Associate for an BUU’md assessment year and is unpaid due to payment default.

4. Charge Code Effective Dates

Charge Docum Code/ Effective Effective ent Version Update Type Start Date End Date Pre-calc Version Name CC 7597 Transferred Documentation Edits Frequency 5.0 01/01/15 Open and Configuration Response Impacted Charge

ÓCAISO, 2018 Page 14 of 14